WTO agreement on agriculture
The Agreement on Agriculture is one of the key agreements within the WTO system. Its importance is reflected by its presence as the first Agreement annexed to the Marrakesh Agreement establishing the WTO.
Market access
Market access simply means the right which exporters have to access a foreign market. The WTO agreements allow WTO Members to protect their markets. In practice “market access” refers to the ways in which that protection can be implemented. In the WTO framework it is a legalistic term indicating the government-imposed conditions under which a product may enter a country and be released for free circulation within that country under normal conditions.
Tariffication
Prior to the Uruguay Round, border protection for agricultural products was not always in the form of tariffs. In addition to tariffs, other non-tariff border measures were applied. A core element of the Uruguay Round negotiations was the agreement to convert these other types of border protection mechanisms into tariffs. This process was called “tariffication.
The process of tariffication is not straightforward. Economists argue as to the appropriate methodology. In theory it is simple. The tariff equivalent of a nontariff border measure is the difference between the world Market Price and the domestic market price for any specific product.
However, it is not easy to determine what is the world market or domestic market price, how these prices should be measured and over what period should the measurement take place. It is also not clear to what extent geographic and transport costs should be taken into consideration.
Special Safeguard Measures
In spite of the market access obligations contained in the Agreement on Agriculture, special safeguard measures may be introduced in respect of those products for which non-tariff measures have been converted into ordinary customs duties and have been “labelled” with the symbol “SSG” in WTO Members’ Country Schedules.
With respect to special safeguard measures, the relevant provision is ARTICLE 5 of the Agreement on Agriculture. Article 5 allows the imposition of an additional customs duty, over and above the bound customs duty (or tariffied duty), when the imported product does not reach a predetermined “trigger” price, or where the volume of imports passes a “trigger” volume.
This means that WTO Members may raise their duties on agricultural products even when the more stringent requirements of Article XIX and the Agreement on Safeguards are not met. This provision is very detailed and must be interpreted strictly to ensure that WTO Members do not abuse their right to invoke exceptions.
The special agricultural safeguards can only be used on products that were tariffied. These amount to less than 20 per cent of all agricultural products. But they cannot be used on imports within the tariff quotas, and they can only be used if the WTO Member reserved the right to do so in its Schedule of agricultural commitments. This might explain why, in practice, the special agricultural safeguards have been used only in relatively few cases.
Agriculture subsdies
The Agreement on Agriculture seeks to ensure that agricultural trade is not distorted through the use of subsidies. Agricultural support measures are classified as belonging to two major groups:
- domestic support and general support; and
- export subsidies.
In WTO non-legal terminology, domestic subsidies to agricultural products are identified by special “boxes” which are given the colours of traffic lights: “Green” meaning permitted because they have no, or minimal, distortive effect on trade; “Amber” meaning possibly legal or illegal because of their tradedistortive nature; and “Blue” meaning possibly trade-distorting but permitted as the measures are linked to production limitation programmes.
Amber Box Measures
All domestic support measures which do not correspond to the exceptional arrangements known as the “Green” and “Blue” boxes, are considered to distort production and trade and therefore fall into the “Amber Box” category.
Green Box Exemption
The subsidies falling under this category are non-actionable (in other words, immune from challenge) by virtue of Article 13 of the Agreement on Agriculture (the Due Restraint or “peace clause” provision). In particular, the domestic support measures that fully conform to the provisions of Annex 2 to the Agreement on Agriculture are considered non-actionable subsidies for purposes of countervailing duties during the implementation period of the Agreement on Agriculture.
Blue Box Measures
The “Blue Box” exemption category is contained in Article 6.5 of the Agreement on Agriculture. It covers any support measure that would normally be in the “Amber Box”, but which is placed in the “Blue Box” if the support also requires farmers to limit their production.
“Blue Box” subsidies are considered to be possibly trade-distorting but permitted under the Agreement on Agriculture. This means that they are not immune from challenge through WTO dispute settlement proceedings or under unilateral and multilateral remedies.
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The Agreement on Agriculture (AoA) is one of the most important agreements of the World Trade Organization (WTO). It was signed in 1994 and came into effect in 1995. The AoA aims to reduce trade barriers in agriculture and to promote agricultural trade Liberalization-2/”>Liberalization.
The AoA covers a wide range of issues, including market access, domestic support, export subsidies, sanitary and phytosanitary measures, technical barriers to trade, rules on competition, state trading enterprises, food aid, dispute settlement, implementation, review, relationship with other WTO agreements, transparency, special and differential treatment, and institutional arrangements.
Market access is one of the most important issues covered by the AoA. The AoA aims to reduce tariffs and other trade barriers on agricultural products. Tariffs are taxes that are imposed on imported goods. Other trade barriers include quotas, which are limits on the quantity of goods that can be imported, and non-tariff barriers, which are measures that are not taxes but that can still restrict trade, such as sanitary and phytosanitary measures.
Domestic support is another important issue covered by the AoA. Domestic support is government assistance to farmers. This assistance can take many forms, such as direct payments to farmers, subsidies for inputs such as fertilizer, and price supports. The AoA aims to reduce the level of domestic support that is provided by governments.
Export subsidies are another important issue covered by the AoA. Export subsidies are payments that are made by governments to exporters of agricultural products. These payments can make it cheaper for exporters to sell their products on the world market. The AoA aims to reduce the level of export subsidies that are provided by governments.
Sanitary and phytosanitary measures are measures that are taken to protect human, animal, or plant Health. These measures can include things like quarantines, inspection requirements, and labeling requirements. The AoA aims to ensure that sanitary and phytosanitary measures are not used as disguised barriers to trade.
Technical barriers to trade are measures that are taken to protect consumers or the Environment. These measures can include things like product standards, testing requirements, and labeling requirements. The AoA aims to ensure that technical barriers to trade are not used as disguised barriers to trade.
Rules on competition are rules that are designed to prevent anti-competitive behavior in the marketplace. This behavior can include things like price-fixing, market allocation, and bid rigging. The AoA aims to ensure that there is fair competition in the agricultural sector.
State trading enterprises are enterprises that are owned or controlled by governments. These enterprises can engage in trade in agricultural products. The AoA aims to ensure that state trading enterprises do not engage in anti-competitive behavior.
Food aid is food that is donated by governments or international organizations to countries that are experiencing food shortages. The AoA aims to ensure that food aid is not used as a disguised form of Export Subsidy.
Dispute settlement is a process that is used to resolve disputes between WTO members. The AoA sets out the rules for dispute settlement in the agricultural sector.
Implementation is the process of putting the AoA into effect. This includes things like changing domestic laws and regulations to comply with the AoA.
Review is the process of assessing the implementation and effectiveness of the AoA. This is done periodically by the WTO Committee on Agriculture.
Relationship with other WTO agreements is the relationship between the AoA and other WTO agreements. The AoA is one of the 16 multilateral trade agreements that are administered by the WTO. The AoA must be interpreted and applied in a way that is consistent with other WTO agreements.
Transparency is the requirement that WTO members publish information about their trade policies and practices. This information must be made available to the public and to other WTO members.
Special and differential treatment is the provision of special treatment for developing and least-developed countries. This treatment is designed to help these countries adjust to the changes that are brought about by the AoA.
Institutional arrangements are the institutions that are responsible for implementing and administering the AoA. These institutions include the WTO Committee on Agriculture and the WTO Dispute Settlement Body.
The AoA is a complex agreement that covers a wide range of issues. It has had a significant impact on agricultural trade. The AoA has helped to reduce trade barriers, increase market access, and reduce subsidies. However, the AoA has also been criticized for not going far enough in liberalizing agricultural trade.
What is the WTO?
The World Trade Organization (WTO) is an international organization that deals with the rules of trade between nations. It was established in 1995 and has 164 member countries. The WTO’s goal is to help trade flow smoothly, freely, fairly, and predictably.
What is the Agreement on Agriculture?
The Agreement on Agriculture is one of the 16 multilateral agreements that make up the WTO’s legal framework. It was negotiated during the Uruguay Round of multilateral trade negotiations, which lasted from 1986 to 1994. The Agreement on Agriculture came into effect on 1 January 1995.
What are the main provisions of the Agreement on Agriculture?
The Agreement on Agriculture covers a wide range of issues, including market access, domestic support, export subsidies, and sanitary and phytosanitary measures. The main provisions of the Agreement on Agriculture are as follows:
- Market access: The Agreement on Agriculture aims to improve market access for agricultural products by reducing tariffs and other trade barriers.
- Domestic support: The Agreement on Agriculture limits the amount of support that governments can provide to their agricultural sectors.
- Export subsidies: The Agreement on Agriculture eliminates export subsidies for agricultural products.
- Sanitary and phytosanitary measures: The Agreement on Agriculture sets rules for the use of sanitary and phytosanitary measures, which are measures that are taken to protect human, animal, or plant health.
What are the benefits of the Agreement on Agriculture?
The Agreement on Agriculture has been credited with increasing agricultural trade and reducing agricultural subsidies. It has also been credited with improving Food Security and reducing POVERTY in developing countries.
What are the challenges of the Agreement on Agriculture?
The Agreement on Agriculture has been criticized for not doing enough to reduce poverty in developing countries. It has also been criticized for not doing enough to protect the environment.
What is the future of the Agreement on Agriculture?
The Agreement on Agriculture is currently under review by the WTO. The review is expected to be completed in 2020. The outcome of the review is uncertain, but it is possible that the Agreement on Agriculture will be amended or replaced.
Question 1
Which of the following is not a goal of the WTO Agreement on Agriculture?
(A) To reduce trade-distorting subsidies
(B) To increase market access for agricultural products
(C) To stabilize world agricultural markets
(D) To promote Sustainable Development in agriculture
Answer
(D)
The WTO Agreement on Agriculture is a multilateral agreement that was signed in 1994 as part of the Uruguay Round of trade negotiations. The agreement’s goals are to reduce trade-distorting subsidies, increase market access for agricultural products, and stabilize world agricultural markets. The agreement does not include a goal of promoting sustainable development in agriculture.
Question 2
Which of the following is not a type of agricultural subsidy?
(A) Price support
(B) Input subsidy
(C) Export subsidy
(D) Domestic support
Answer
(D)
Domestic support is not a type of agricultural subsidy. Agricultural subsidies are government payments to farmers or other agricultural producers. There are two main types of agricultural subsidies: price support subsidies and input subsidies. Price support subsidies are payments to farmers that are designed to keep the prices of agricultural products above market levels. Input subsidies are payments to farmers that are designed to reduce the costs of production, such as the cost of fertilizer or pesticides.
Question 3
Which of the following is not a measure that can be used to reduce trade-distorting subsidies?
(A) Tariffication
(B) Domestic support reduction commitments
(C) Export subsidy reduction commitments
(D) Special and differential treatment
Answer
(D)
Special and differential treatment is a measure that can be used to reduce trade-distorting subsidies. Tariffication, domestic support reduction commitments, and export subsidy reduction commitments are all measures that can be used to reduce trade-distorting subsidies.
Question 4
Which of the following is not a benefit of the WTO Agreement on Agriculture?
(A) Increased market access for agricultural products
(B) Reduced trade-distorting subsidies
(C) Increased food security
(D) Increased income for farmers
Answer
(C)
The WTO Agreement on Agriculture has not resulted in increased food security. The agreement has resulted in increased market access for agricultural products and reduced trade-distorting subsidies. However, the agreement has also led to increased volatility in world agricultural markets, which has made it more difficult for countries to ensure food security.
Question 5
Which of the following is not a criticism of the WTO Agreement on Agriculture?
(A) The agreement has not resulted in significant reductions in trade-distorting subsidies
(B) The agreement has led to increased volatility in world agricultural markets
(C) The agreement has benefited developed countries at the expense of developing countries
(D) The agreement has not done enough to promote sustainable development in agriculture
Answer
(A)
The WTO Agreement on Agriculture has resulted in significant reductions in trade-distorting subsidies. The agreement has also led to increased volatility in world agricultural markets and benefited developed countries at the expense of developing countries. However, the agreement has done a significant amount to promote sustainable development in agriculture.